“Weaker than expected performance in our export markets and in our domestic General Surgery business slowed our progress this quarter. I remain confident that CONMED has the right team of leaders and the sense of urgency necessary to advance our turnaround efforts.”

Sales were $169.2 million, a decrease of 3.3% compared to the third quarter of 2014. On a constant currency basis, sales increased 0.5% over the prior-year period.

Diluted earnings per share (GAAP) were $0.32, compared to $0.07 in the third quarter of 2014.

Adjusted diluted earnings per share were $0.38 versus $0.44 in the prior-year period.

Appointed Nathan Folkert as Vice President and General Manager of Orthopedics.

“While I am pleased to see total Company constant currency sales break back into positive growth, the overall results indicate the transformative changes we are pursuing are taking longer to implement than we had anticipated,” commented Curt R. Hartman, CONMED’s President and Chief Executive Officer. “Weaker than expected performance in our export markets and in our domestic General Surgery business slowed our progress this quarter. I remain confident that CONMED has the right team of leaders and the sense of urgency necessary to advance our turnaround efforts.”

Sales Analysis

For the quarter ended September 30, 2015, domestic sales, which represented 51.9% of total revenue, increased 1.3%, driven by growth in capital equipment sales within Visualization and Orthopedics. International sales, which represented 48.1% of total revenue, declined 7.8% compared to the third quarter of 2014 on a reported basis. Foreign currency exchange rates, including the effects of the FX hedging program, had a negative impact of $6.6 million on third quarter sales. In constant currency, international sales decreased 0.4% versus the prior-year period as a result of a decline in sales of capital equipment, particularly within General Surgery and Visualization.

Earnings Analysis

Reported net earnings totaled $8.9 million in the quarter, compared to reported net earnings of $2.0 million in the prior year. Reported diluted net earnings per share were $0.32 in the quarter, compared to $0.07 in the prior-year period. Reported net earnings for the third quarter of 2014 included substantially higher costs related to restructuring and shareholder activism. The effect of each of these items on reported net earnings appears in the reconciliation of GAAP to non-GAAP measures provided below.

Excluding the impact of the items described above, adjusted net earnings of $10.6 million decreased 13.2% year over year and adjusted diluted net earnings per share of $0.38 decreased 13.6% year over year. The decline in adjusted net earnings was largely attributable to weaker than anticipated international sales, the negative impact of foreign currency, and a higher tax rate, partially offset by improved gross margin and lower operating expenses during the quarter.

2015 Outlook

Based on weaker than expected third quarter sales, the Company has reduced its 2015 constant currency organic sales growth estimate to 0% to 1%, compared to the previous estimate of 1% to 3%.

Using current exchange rates, the Company now forecasts total reported 2015 sales to be in the range of $715 to $720 million, compared to prior guidance of $723 to $738 million. Adjusted earnings per diluted share are now expected to be in the range of $1.65 to $1.70, compared to prior guidance of $1.82 to $1.92.

Conference Call

The Company’s management will host a conference call today at 4:30 p.m. ET to discuss its third quarter results.

To participate in the conference call, dial 800-884-5695 (domestic) or 617-786-2960 (international) and enter the passcode 44699196.

This conference call will also be webcast and can be accessed from the Investors section of CONMED's web site at www.conmed.com. The webcast replay of the call will be available at the same site approximately one hour after the end of the call.

A recording of the call will also be available from 8:30 p.m. ET on Wednesday, October 21, 2015, until 11:59 p.m. ET on Wednesday, October 28, 2015. To hear this recording, dial 888-286-8010 (domestic) or 617-801-6888 (international) and enter the passcode 88091814.

About CONMED Corporation

CONMED is a medical technology company that provides surgical devices and equipment for minimally invasive procedures. The Company’s products are used by surgeons and physicians in a variety of specialties, including orthopedics, general surgery, gynecology, neurosurgery, and gastroenterology. The Company distributes its products worldwide from several manufacturing locations. CONMED has a direct selling presence in 16 countries outside the United States, and international sales constitute over 50% of the Company’s total sales. Headquartered in Utica, New York, the Company employs approximately 3,500 people. For more information, visitwww.conmed.com.

Forward-Looking Statements

This press release contains forward-looking statements based on certain assumptions and contingencies that involve risks and uncertainties. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and relate to the Company's performance on a going-forward basis. The forward-looking statements in this press release involve risks and uncertainties which could cause actual results, performance or trends to differ materially from those expressed in the forward-looking statements herein or in previous disclosures. In addition to general industry and economic conditions, factors that could cause actual results to differ materially from those discussed in the forward-looking statements in this press release include, but are not limited to, the risks relating to forward-looking statements discussed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

The Company supplements the reporting of its financial information determined under accounting principles generally accepted in the United States (GAAP) with certain non-GAAP financial measures, including percentage sales growth in constant currency; adjusted gross profit; cost of sales excluding specified items; adjusted selling and administrative expenses; adjusted operating income; adjusted effective income tax rate; adjusted net earnings and adjusted diluted net earnings per share (EPS). The Company believes that these non-GAAP measures provide meaningful information to assist investors and shareholders in understanding our financial results and assessing our prospects for future performance. Management believes percentage sales growth in constant currency and the other adjusted measures described above are important indicators of our operations because they exclude items that may not be indicative of, or are unrelated to, our core operating results and provide a baseline for analyzing trends in the Company’s underlying businesses. Further, the presentation of EBITDA is a non-GAAP measurement that management considers useful for measuring aspects of the Company’s cash flow. Management uses these non-GAAP financial measures for reviewing the operating results and analyzing potential future business trends in connection with our budget process and bases certain management incentive compensation on these non-GAAP financial measures.

To measure percentage sales growth in constant currency, the Company removes the impact of changes in foreign currency exchange rates that affect the comparability and trend of sales. To measure earnings performance on a consistent and comparable basis, the Company excludes certain items that affect the comparability of operating results and the trend of earnings. These adjustments are irregular in timing, may not be indicative of our past and future performance and are therefore excluded to allow investors to better understand underlying operating trends.

Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, cost of sales, selling and administrative expenses, operating income, effective income tax rate, net earnings and diluted net earnings per share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the reconciliations to corresponding GAAP financial measures below, provide a more complete understanding of our business. The Company strongly encourages investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

Consolidated Condensed Statements of Income

(in thousands except per share amounts, unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2014

2015

2014

Net sales

$

169,184

$

174,961

$

528,151

$

545,052

Cost of sales

75,638

78,547

248,825

245,028

Gross profit

93,546

96,414

279,326

300,024

% of sales

55.3

%

55.1

%

52.9

%

55.0

%

Selling and administrative expense

72,056

87,055

220,423

243,653

Research and development

6,652

6,910

20,695

20,674

Income from operations

14,838

2,449

38,208

35,697

% of sales

8.8

%

1.4

%

7.2

%

6.5

%

Interest expense

1,504

1,540

4,453

4,572

Income before income taxes

13,334

909

33,755

31,125

Provision (benefit) for income taxes

4,461

(1,063

)

11,109

10,272

Net income

$

8,873

$

1,972

$

22,646

$

20,853

Basic EPS

$

0.32

$

0.07

$

0.82

$

0.76

Diluted EPS

$

0.32

$

0.07

$

0.81

$

0.75

Basic shares

27,701

27,454

27,636

27,354

Diluted shares

27,898

27,688

27,853

27,777

Consolidated Condensed Balance Sheets

(in thousands, unaudited)

September

December

2015

2014

Assets:

Cash and cash equivalents

$

65,326

$

66,332

Accounts receivable, net

124,697

129,287

Inventories

161,555

148,149

Other current assets

32,116

37,382

Total Current Assets

383,694

381,150

Property, plant and equipment, net

130,717

133,429

Goodwill

260,755

256,232

Other intangible assets, net

308,059

316,440

Other assets

10,822

10,943

Total Assets

$

1,094,047

$

1,098,194

Liabilities and Shareholders' Equity

Current liabilities

$

111,656

$

115,956

Long-term debt, excluding current maturities

260,545

240,201

Other liabilities

144,421

160,739

Shareholders' equity

577,425

581,298

Total liabilities and shareholders' equity

$

1,094,047

$

1,098,194

Consolidated Condensed Statements of Cash Flows

Nine Months Ended September 2015 and 2014

(in thousands, unaudited)

2015

2014

Operating Activities

Net income

$

22,646

$

20,853

Depreciation and amortization

32,308

34,020

Changes in operating assets and liabilities and other, net

(16,234

)

(15,344

)

Net cash provided by operating activities

38,720

39,529

Investing Activities

Payments related to business acquisitions

(6,104

)

(1,245

)

Purchases of property, plant, and equipment

(11,478

)

(12,250

)

Net cash used in investing activities

(17,582

)

(13,495

)

Financing Activities

Proceeds of debt

21,000

33,000

Payment related to distribution agreements

(16,667

)

(16,667

)

Payment related to contingent consideration

(2,423

)

-

Dividend payments on common stock

(16,565

)

(16,455

)

Repurchase of common stock

-

(16,862

)

Other, net

(600

)

4,378

Net cash used in financing activities

(15,255

)

(12,606

)

Effect of exchange rate change on cash and cash equivalents

(6,889

)

(3,257

)

Net increase (decrease) in cash and cash equivalents

(1,006

)

10,171

Cash and cash equivalents at beginning of period

66,332

54,443

Cash and cash equivalents at end of period

$

65,326

$

64,614

Sales Summary

(in millions, unaudited)

Three Months Ended September

Nine Months Ended September

% Change

% Change

2015

2014

AsReported

ConstantCurrency

2015

2014

AsReported

ConstantCurrency

Orthopedic Surgery

$

89.4

$

92.8

-3.6

%

1.4

%

$

284.8

$

301.1

-5.4

%

-1.0

%

General Surgery

66.1

69.7

-5.2

%

-3.2

%

203.3

203.9

-0.3

%

1.5

%

Surgical Visualization

13.7

12.5

9.6

%

13.8

%

40.1

40.1

0.1

%

3.6

%

$

169.2

$

175.0

-3.3

%

0.5

%

$

528.2

$

545.1

-3.1

%

0.3

%

Single-use products

$

134.9

$

142.4

-5.2

%

-1.6

%

$

420.4

$

439.0

-4.2

%

-0.9

%

Capital products

34.3

32.6

5.2

%

9.6

%

107.8

106.1

1.6

%

5.1

%

$

169.2

$

175.0

-3.3

%

0.5

%

$

528.2

$

545.1

-3.1

%

0.3

%

Reconciliation of Reported Net Earnings to Adjusted Net Earnings

(in thousands, except per share amounts, unaudited)

Three Months Ended September 2015

Gross Profit

Selling &AdministrativeExpense

OperatingIncome

NetIncome

EffectiveTax Rate

DilutedEPS

As reported

$

93,546

$

72,056

$

14,838

$

8,873

33.5

%

$

0.32

% of sales

55.3

%

8.8

%

Restructuring costs (1)

1,316

(1,331

)

2,647

1,694

0.4

%

0.06

Adjusted

$

94,862

$

70,725

$

17,485

$

10,567

33.9

%

$

0.38

% of sales

56.1

%

10.3

%

Three Months Ended September 2014

Gross Profit

Selling &AdministrativeExpense

OperatingIncome

NetIncome

EffectiveTax Rate

DilutedEPS

As reported

$

96,414

$

87,055

$

2,449

$

1,972

-116.9

%

$

0.07

% of sales

55.1

%

1.4

%

Restructuring costs (1)

1,448

(687

)

2,135

1,366

1.8

%

0.05

Management restructuring costs (2)

-

(11,022

)

11,022

7,054

141.2

%

0.25

Patent dispute and other matters (3)

-

(334

)

334

214

0.2

%

0.01

Shareholder activism (4)

-

(2,441

)

2,441

1,562

1.4

%

0.06

Adjusted

$

97,862

$

72,571

$

18,381

$

12,168

27.7

%

$

0.44

% of sales

55.9

%

10.5

%

Reconciliation of Reported Net Earnings to Adjusted Net Earnings

(in thousands, except per share amounts, unaudited)

Nine Months Ended September 2015

Gross Profit

Selling &AdministrativeExpense

OperatingIncome

NetIncome

EffectiveTax Rate

DilutedEPS

As reported

$

279,326

$

220,423

$

38,208

$

22,646

32.9

%

$

0.81

% of sales

52.9

%

7.2

%

Restructuring costs (1)

5,179

(9,795

)

14,974

9,583

1.0

%

0.35

Adjusted

$

284,505

$

210,628

$

53,182

$

32,229

33.9

%

$

1.16

% of sales

53.9

%

10.1

%

Nine Months Ended September 2014

Gross Profit

Selling &AdministrativeExpense

OperatingIncome

NetIncome

EffectiveTax Rate

DilutedEPS

As reported

$

300,024

$

243,653

$

35,697

$

20,853

33.0

%

$

0.75

% of sales

55.0

%

6.5

%

Restructuring costs (1)

3,754

(1,855

)

5,609

3,590

0.3

%

0.13

Management restructuring costs (2)

-

(11,022

)

11,022

7,055

0.8

%

0.26

Patent dispute and other matters (3)

-

(3,677

)

3,677

2,353

0.1

%

0.08

Shareholder activism (4)

-

(3,966

)

3,966

2,538

0.1

%

0.09

New York State corporate tax reform (5)

-

-

-

2,258

-4.1

%

0.08

Adjusted

$

303,778

$

223,133

$

59,971

$

38,647

30.2

%

$

1.39

% of sales

55.7

%

11.0

%

(1) In 2014 and 2015, the Company continued the operational restructuring, including the consolidation of our Centennial, Colorado manufacturing operations into other existing CONMED manufacturing facilities. Additionally, in 2014 and 2015, the Company restructured certain sales, marketing and administrative functions and incurred severance and other related costs.

(2) In 2014, the Company incurred certain costs associated with executive management restructuring, including our then Chief Executive Officer.

(3) In 2014, the Company incurred legal and settlement costs associated with a patent infringement claim, costs associated with a legal matter in which we prevailed at trial and business acquisition costs.

(4) In 2014, the Company incurred certain costs associated with shareholder activism.

(5) In 2014, New York State enacted corporate tax reform changing the tax rate of a manufacturing company such as CONMED to essentially 0%. As a result, our previously recorded New York State net deferred tax asset were written off to income tax expense.